[Congressional Record Volume 156, Number 101 (Thursday, July 1, 2010)]
[Extensions of Remarks]
[Pages E1283-E1284]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          INTRODUCTION OF THE STAND BY YOUR OIL POLLUTION ACT

                                 ______
                                 

                        HON. GERALD E. CONNOLLY

                              of virginia

                    in the house of representatives

                         Thursday, July 1, 2010

  Mr. CONNOLLY of Virginia. Madam Speaker, in 1989 the Exxon Valdez oil 
tanker ran aground in Prince William Sound, spilling 10.9 million 
gallons of oil that eventually coated 1,100 miles of Alaskan coastline. 
Following this disaster, Congress passed the Oil Pollution Act in 1990 
to require that oil companies pay the full cleanup costs of oil spills. 
However, this legislation has a couple of loopholes that need to be 
closed. If an oil company subsidiary is responsible for the spill, that 
subsidiary can declare bankruptcy and sell its assets, even to its 
parent company, without passing on cleanup cost liabilities. The SPILL 
Act, which the House will vote on this week, will close this loophole 
so that liability follows subsidiary assets. Whether or not the SPILL 
Act becomes law, there will be another loophole in the Oil Pollution 
Act: If a subsidiary is

[[Page E1284]]

responsible for an oil spill, it can declare bankruptcy and not sell 
its assets, in which case the parent company would not inherit cleanup 
liabilities.
  This is a realistic scenario, given the high cost of oil spills. Even 
a well capitalized company worth several billion dollars could be 
responsible for an oil spill that costs tens of billions of dollars to 
clean up. The Exxon Valdez spill cost over $2 billion just to clean up 
10.9 million gallons of oil. As of late June, the Deepwater Horizon 
spill had already cost BP $2.65 billion with total cleanup cost 
estimates as high as $100 billion. Moreover, if Congress increases the 
cap on private liability under the Oil Pollution Act, oil companies 
could be responsible for much greater costs. The fishing industry in 
the Gulf is worth $5.5 billion annually. Just losing 50% of western 
Florida's tourism would cost the state $10 billion. If Congress 
eliminates the private liability cap under OPA then an oil company 
responsible for a spill could be responsible for tens of billions of 
dollars to reimburse property owners and workers for lost property and 
wages. Given the extraordinarily high cleanup and private liability 
costs of oil spills, we must close the loophole that allows parent 
companies to escape liability by letting subsidiaries go bankrupt.
  I have introduced legislation, the Stand by your Oil Pollution (STOP) 
Act, to prevent oil companies from shedding liabilities of 
subsidiaries. This legislation is necessary to ensure that BP doesn't 
escape its cleanup responsibilities in the Gulf and to prevent oil 
companies from setting up subsidiaries to avoid liability for spills in 
the future.

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